Financial Planners
(CONTINUED FROM PAGE 57)
either. I could rack up billable hours,
for example, by telling you I have to ac-
tively manage your portfolio. Richard
Salmen, past FPA national president,
has other caveats. For example, he
thinks the hourly model might discour-
age a client from seeking advice. “It
would be like seeing the dentist only
when you are in pain,” he says.
The FPA is “revenue neutral,”
meaning it takes no position on which
fee model is the best. Be aware that no
model is conflict-free.
How we sell you
All planners know that the quick-
est way to your money is through
your emotions. To get you to sign up,
many follow a five-step system. We
invite you to talk about your values
and get you excited by discussing
your goals. We might ask you to
describe your “perfect day,” then
help you understand the amount of
money you’d need to make your fu-
ture one long string of perfect days.
Finally, we’ll try to close the deal,
which means you commit to hiring
the planner and promise to implement
the planner’s advice. “I can get you
to your dreams of spending time with
your grandkids if you let me handle
your money now,” the planner might
say. “Sign here and I’ll get to work!”
In one hour we’ll try to get you
wound up enough to sign your entire
nest egg over to us. We know that if you
walk out of our office without signing,
you may realize how manipulative
the session was and never return. But
once you sign and buy some product,
you may find it will take years to get
your money back without penalties.
So don’t even think about signing any
document during your first meeting
with a planner, even if he or she tells
you that you can still back out.
And that is among the more ethi-
cal methods planners use to sign up
clients. Others use outright deception:
Any ad that promises wealth without
risk or a high “guaranteed” return is
almost certainly a scam. Have you ever
seen advertisements for a CD boasting
interest rates far above what banks are
offering? They are merely bait-and-
switch tactics to get you into our office,
where we can sell you other products.
When I complained to the Colorado
Division of Insurance about such ad-
vertisements in my state, I was told
that the ads didn’t violate the state’s
insurance law. Be particularly cautious
about promises made at a free “educa-
tional” dinner. Better yet, skip the free
meal altogether; you’ll save a lot more
money in the long run.
My advice
It may seem as if I’m trying to drive you
away from financial planners. I’m not.
Focusing on your financial goals and
finding a path to realize them is a valu-
able, even indispensable service. Most
of us do that as well as possible. But un-
derstand our limitations. (See “What
Planners Can Do for You” and “What
Planners Can’t Do for You,” page 56.)
You should also remember that
virtually anyone can fill an office with
prestigious-looking credentials and
call himself or herself a financial plan-
ner. “For seniors, it is the financial
equivalent of the Wild West,” says
Harvard economics professor David
Laibson. “Many so-called planners are
free of almost all regulatory oversight
or constraints.” Don’t get ambushed:
Follow the tips in “ 10 Ways to Get the
Best Money Advice” ( page 57) and you
should be able to find a financial plan-
ner you can trust. But never trust an
adviser so much that you follow that
person blindly. ;
Allan Roth is a certified financial planner
and CPA in Colorado Springs. He writes
for CBS Money Watch.com.
Photo Credits Cancer Pages 46–47: From left:
Science Source/Getty Images; Interfoto/Alamy;
courtesy therailnut.com; Istockphoto ( 2); AP Photo;
courtesy of Dr. Janet Rowley/National Library of Medicine; courtesy of FDA; Ted Thai/Time & Life Pictures/
Getty Images Big 5-Oh Page 72: Craig Ferguson: reference, David Livingston/Getty Images; Jeff Dunham: AP
Photo; The Incredible Hulk: courtesy of Marvel Comics;
Genie Francis: Cliff Lipson/CBS/Getty Images; Marilu
Henner: Jeffrey Mayer/Getty Images; Mr T: AP Photos;
Barbra Streisand: Chelsea Lauren/Getty Images.
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DEBUT HERA SHAG
I R I SH AVON TOFU
PAGER NEWT AN T I
ERLE LEX SPASMS
A T L AS NCO T RA I L
LASSOS EVA LURE
TR I PLESPACED
CBS EER RIO EDS
HOMERS I MPSON
AWAY TEAL DEARS
R I LE ASTA LOYAL
MELS STAY ENEMY
Draw You a Picture
1. Puttin’ on the Ritz
2.
Bright-eyed and bushy-tailed
3. Square peg in a round hole
4. Wet blanket
5. Zip your lips
6. Barking up the wrong
tree
7. For crying out loud
8. Run it up the flagpole
9. Left holding the bag
10. The cat’s pajamas
Solutions to puzzles on page 70
Correction: December–January’s “Playing the
Numbers” brainteaser asked you to sort the numbers 1 through 13 “according to a certain rule.” We had
in mind whether they could “be turned upside down
and still be read as numbers.” Thus the 8 should have
appeared above the line, not below. Our apologies!
